As December 2025 commences, Indian stock market investors are maintaining their optimistic stance, banking on the month's traditionally favorable seasonal trends to sustain the current momentum. The market enters the final month of the year with cautious optimism despite Friday's largely unchanged closing.
Friday's Market Performance and Key Levels
On the last trading day of November, Indian equities finished nearly flat as traders opted to book profits at elevated levels and exercised caution ahead of crucial Q2 GDP data release. Mixed signals from global markets further contributed to the subdued sentiment.
The benchmark Sensex concluded at 85,706.67, marking a minor decline of 14 points or 0.02%, while the Nifty 50 settled at 26,202.95, down 13 points or 0.05%. The broader market indices also witnessed slight pressure, with the BSE Midcap and Smallcap indices edging lower by 0.04% and 0.13% respectively.
Historical December Performance Analysis
Historical data reveals compelling patterns for December trading. The Nifty 50 has delivered positive returns in six out of the past ten years, averaging gains exceeding 1.6%. The 50-stock index finished in positive territory during 2015, 2017, 2019, 2020, 2021, and 2023, while posting declines in 2016, 2018, 2022, and 2024.
The most impressive December rallies occurred in 2023 with a 7.94% surge and 2020 with a 7.81% climb. The broader market segments have shown even stronger historical performance during December.
Nifty Midcap has remained positive in seven out of ten years, delivering an average return of 2.1%, while Nifty Smallcap has generated average returns of at least 2.8% in eight out of ten December months.
Sector-wise analysis indicates that IT, Metal, and Real Estate have typically been the strongest performers in December, with average returns of 3.7%, 4.3%, and 3.9% respectively. Conversely, FMCG, Energy, Auto, Pharma, and Banking sectors have historically recorded more moderate increases during the year's final month.
Technical Outlook and Expert Views
According to Ponmudi R, CEO of Enrich Money, the upcoming week promises to be pivotal for market direction. Several key domestic and global triggers will determine whether equities can extend their winning streak and venture into uncharted territory.
The Sensex is currently trading around the 85,700 zone, consolidating just below its lifetime high. This indicates short-term equilibrium as the index seeks fresh directional impetus. Technical analysis suggests that a decisive close above 86,000 could trigger the next upward leg toward 86,700-88,000 levels. On the downside, a break below 85,500 might lead to a mild corrective movement toward 85,200-84,850.
Nifty 50 has spent the last two sessions consolidating just below its lifetime high zone, trading in a tight range between 26,150 and 26,300. This controlled consolidation signals a market preparing for its next directional move. As long as the crucial support zone at 26,150-26,000 remains intact, the broader structure maintains its stable and bullish character.
Bank Nifty has maintained a bullish-to-neutral structure over recent sessions, holding firmly above its earlier resistance trendline and key base near 59,500-59,600. Friday's trading formed a star-doji pattern, indicating short-term indecision following a strong upward movement. The previous resistance trendline has now clearly transformed into trendline support, preserving the broader structural integrity.
Market positioning in derivatives continues to signal a clear bullish undertone, suggesting that despite near-term fluctuations, the medium-term outlook remains firmly constructive for Indian equities as 2025 approaches its conclusion.
